1. FASB Accounting Standards Codification TM Thomas Hoey Director of FASB Codification Project August 27, 2008 ACPEN Network Compilation & Review Update

2. © 2008 Financial Accounting Standards Board 2 Agenda Background –Why a Codification? –What is the Codification? –How is it structured? –What is the timeline? –How will users navigate the Codification? –How will FASB update the Codification? Demonstration Next steps and related matters

3. © 2008 Financial Accounting Standards Board 3 Current State Accounting Research BulletinsAccounting Principles Board Opinions AICPA Accounting Interpretations FASB Statements FASB Interpretations FASB Technical Bulletins FASB Staff Implementation Guidance FASB Staff Positions FASB Concepts Statements EITF Abstracts (and issue summaries) EITF Appendix D AICPA Statements of Position AICPA Audit and Accounting Guides AICPA Audit Risk Alerts AICPA Practice Bulletins AICPA Technical Questions and Answers AICPA Issues Papers SEC S-X RulesSEC S-K Items SEC ASR / FRR Codification SectionsSEC SAB Codification Topics SEC Speeches—Topics Covered Note: Not all of the above are level A-D GAAP and therefore are not in the FASB Accounting Standards Codification

4. © 2008 Financial Accounting Standards Board 4 Why a Codification? Constituent concern that U.S. GAAP is overly confusing and difficult to research Multiple types of standards, multiple standard setters, multiple indexing schemes, and different levels of authority make it difficult to retrieve all relevant U.S. GAAP

5. © 2008 Financial Accounting Standards Board 5 What Is the Codification? Current level A-D U.S. GAAP (issued by a standard setter) codified into a topically-organized format NOT intended to change U.S. GAAP Upon approval by the FASB, it will be the single authoritative source for U.S. GAAP and supersede existing sources of U.S. GAAP Any sources of U.S. GAAP not included in the Codification will be NON-authoritative On-line Codification Research System designed for the topically-organized content to improve the usability of authoritative U.S. GAAP

6. © 2008 Financial Accounting Standards Board 6 Content Codification includes authoritative guidance (for example, standards sections, implementation guidance, and so forth) Codification excludes content deemed redundant or non-authoritative (for example, much of basis for conclusions) Codification is authored assuming a December 31, 2008 effective date –Guidance that is effective after that date is transitional Codification Research System provides references to the standards used in the codification

7. © 2008 Financial Accounting Standards Board 7 SEC Content SEC content is the domain of the SEC SEC content included in Codification topics, but in separate SEC sections –SEC guidance is required only for SEC registrants –Many private companies do not want SEC guidance SEC Material sections include the full text of the relevant guidance

8. © 2008 Financial Accounting Standards Board 8 How Is the Codification Structured? Areas—Groupings of topics –General Principles –Presentation –Financial Statement Accounts Assets, Liabilities, Equity, Revenue, Expense –Broad Transactions –Industry Topics—Broadest categorization of related content –Correlate with IFRS / IAS standards Subtopics—generally distinguished by type or scope Sections—nature of the content, such as recognition, measurement, disclosure, and so forth –Correlate with IFRS / IAS sections

9. © 2008 Financial Accounting Standards Board 9 Topic Subtopics Sections Subsections Leases ScopeDisclosure Scope Disclosure Capital Leases Operating Leases Overall Lessees Lessors Note: This is for illustration only and does not include all Topics, Subtopics, Sections and Subsections. Lessees Lessors Example Lessees Lessors Lessees

10. © 2008 Financial Accounting Standards Board 10 What Is the Codification Timeline? Released on January 15 to begin verification One-year verification period –Content not yet authoritative –Constituents will have the option to use (free of charge) to research accounting issues and provide content-related feedback –Will be updated during the verification period for feedback received and newly issued standards Expected to release as authoritative in April 2009 –Constituents will be REQUIRED to use

11. © 2008 Financial Accounting Standards Board 11 How will users navigate the Codification? Available free of charge for those who register online at: http://asc.fasb.org The Codification home page includes tutorials Today’s presentation will demonstrate certain aspects of the Codification

12. © 2008 Financial Accounting Standards Board 12 How will the FASB update the Codification? The FASB will develop Codification update instructions to document changes to the Codification After the Codification becomes authoritative –The FASB will continue to issue individual standards in the form of Codification Updates numbered as Year – Sequence (such as, FASB Codification Update 2009-03) –The FASB will update the Codification concurrent with the release of a Codification Update Transitional text will be presented in the Codification together with current text so that users can access both current and transitional text in the same location

13. © 2008 Financial Accounting Standards Board 13 Transitional Text 25-5 This is some illustrative text. 25-5 This is the revised text. Pending TextLink to Transition Guidance Codification Update Instructions Codification

14. © 2008 Financial Accounting Standards Board 14 Demonstration

15. © 2008 Financial Accounting Standards Board 15 Next Steps for FASB Updating for –Pending topics Business Combinations Insurance Industry –New standards –Verification feedback Interactive data (XBRL/Tagged financials) –Recently released US GAAP Taxonomy –Updating the taxonomy for Codification references

16. © 2008 Financial Accounting Standards Board 16 Steps for Audience Verification period is opportunity to correct possible errors Strongly suggest that you –Use the Codification for research AND –Provide feedback during the remainder of the verification period

17. © 2008 Financial Accounting Standards Board 17 Questions